Foster Wheeler signs term sheet for $289.9 million bank loan

By Sara Rosenberg

New York, June 5 - Foster Wheeler Ltd. said it signed a term sheet for a new $289.9 million credit facility. Bank of America led the bank group. Finalization of the credit facility is dependent on the company's refinancing or replacement of its existing sale/leaseback facility for a portion of its corporate headquarters, the replacement of its recently terminated receivables securitization facility and acceptable documentation to lenders.

The loan consists of a term loan, a revolver and a letter of credit facility, all of which mature in 2005, according to the company.

Interest rates on the tranches are not being revealed at this time, according to a company spokesman. Security for the loan is a first priority lien on the company's domestic assets.

"I am extremely pleased that we have reached preliminary agreement on the terms of a new credit facility for the company," said Raymond J. Milchovich, chairman, president and chief executive officer, in a news release. "We are highly confident that the progress toward obtaining a new credit facility and the financial foundation this will provide, combined with the significant improvements we are making in project operations and reducing costs, will dramatically improve our ability to create value for our worldwide customer base in the future."

The company announced on May 31 that it received an additional extension through June 30 of its waiver under its current revolver and the forbearance of remedies under the lease financing facility. These extensions were a necessary part in finalizing the terms of a definitive agreement, the release said.

Foster Wheeler Ltd., based in Hamilton, Bermuda with operational headquarters in Clinton, N.J., offers design, engineering, construction, manufacturing, project development and management, plant operation and environmental services.

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